Russian producer snaps up second Norwegian smolt farm

Russia’s largest salmonid producer, Russia Aquaculture, has successfully acquired a second smolt production facility in Norway, from Olden Oppdrettsanlegg AS.

The flow-through facility has operated since 1995 and has been a long-term supplier of Russian Aquaculture. It can produce up to 2 million Atlantic salmon and trout annually and Russian Aquaculture expects to receive the first shipment of smolt from the facility in 2018.

The company views this acquisition as an important step towards building an efficient vertically integrated holding and achieving the company’s strategic goal of producing up to 25-30,000 tonnes of salmonids annually by 2025.

Together with Villa Smolt, which Russian Aquaculture acquired in July for NOK 16.6 million (£1.58m), the company should now be nearly self-sufficient in smolt, significantly reducing operating costs and biological risks.

Russian Aquaculture plans to retain the personnel currently managing the facility and to develop the asset. This acquisition will also enable the company to gain significant experience in the smolt farming business, which may be further utilised in the construction of a smolt plant in Russia.

“In a relatively short period of time we have made two important steps towards securing the stable supply with our own smolt,” said Ilya Sosnov, CEO of Russian Aquaculture. “I am confident that this investment will strengthen our market position as well as decrease operating costs and biological risks. We are very happy to have acquired this first-class asset, and welcome the opportunity to work together with Norwegian colleagues who are among our longest-standing partners.”

Upturn in fortunes

The company has recently reversed its fortunes, with H1 2017 profits reaching RUB 57.7 million (£760,000), up from a RUB 88m loss during the same period of 2016.

Its core areas are producing Atlantic salmon in the Murmansk area of the Barents Sea, and trout in lakes in the Republic of Karelia.

The company currently owns farming rights for 30 sites, equating to a potential production volume of around 50,000 tonnes. Its long-term development strategy involves the creation of the largest vertically integrated player in the aquaculture market, including production of own fry, primary processing and distribution of its own products.